NASDAQ futures are coming into the second Monday in May with a slight gap down after an overnight session featuring extreme range on elevated volume. Price was balanced overnight until about midnight New York when sellers began a campaign that ultimately worked price down through the Friday low around 2:45am. Since then price has balanced along the Friday low, and as we approach cash open price is hovering near the Friday low.
On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week featured a hard down move through Tuesday, then chop along the lows until a rally took shape Thursday and into the weekend. Dow had relative strength all week. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal day, which is anything but, happening less than 15% of the time. A normal day features no range extension after the first hour of trade. Friday began with a gap up beyond the prior three days’ ranges. Then there was an open-test lower, then drive higher. Said drive continued for the first hour, successfully closing the gap left behind Monday . That would be it for price discovery. The rest of the session saw price steadily return to the midpoint, then sellers reclaimed the mid, then we nearly went range extension down but instead held initial balance and worked back to the mid. We ended the session hovering below the mid.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 13,717.50. From here buyers continue higher, up through overnight high 13,752. Look for sellers just above at 13,766 and for two way trade to ensue.
Hypo 2 stronger buyers trade up to 13,800 before two way trade ensues.
Hypo 3 gap-and-go lower, down through overnight low 13,636.50. Look for buyers down at 13,606 and for two way trade to ensue.
Volume profiles, gaps and measured moves:
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